Friday, June 27, 2008

$7 A Gallon Gas in 2010 Would Raise Many Questions

Jeff Rubin at CIBC World Markets is predicting $7 a gallon gas in 2010.

If this comes to pass, what will the implications be for driving habits, commuting patterns, real estate prices, and economic growth? In the Denver region does this open up an opportunity to accelerate renewable energy development? Will ConocoPhillips ramp up their employment of local workers at their Louisville campus even faster than the recently announced 7,000 workers by 2028?

FasTracks can't get here soon enough.

The Implications of Airline Turbulence for the Denver Regional Economy

When global companies make headquarters site selection decisions, access to transportation linkages is often a key factor.

"With customers and operations in all 50 U.S. states and 160 countries, air travel to and from Dallas will be more convenient, time efficient and cost effective. The DFW airport is the third largest in the U.S. and one of the top six in the world, offering daily nonstop service to 35 international and 133 U.S. destinations. Additionally, Dallas enjoys a second major airport; Love Field — the 50th largest U.S. airport — offers more than 160 nonstop flights daily.

Being headquartered near leading air transportation facilities is critical to global companies like AT&T as the airline industry continues to consolidate and reduce hubs and flights amid higher fuel prices and industry economic pressures."

AT&T Press Release Announcing the Relocation of their Corporate Headquarters from San Antonio to Dallas, June 27, 2008.

The press release above, shows that senior corporate decision-makers are keenly aware of the impending contraction of the airline industry in the face of high fuel prices and the economic slowdown. Decision-makers believe it is important to be located in a air hub city with multiple airline networks to avoid the risks and costs being in a city with "thin" or "shrinking" linkages to the global transportation network.

At first blush this portends well for Denver given the high traffic density at DIA. Denver is clearly better situated within the global airline network than the vast majority of cities around the country. A View of the Rockies believes that its hard to overstate DIA's importance to the economic health of the Denver Metro Region and that building the airport was a wise and necessary investment.

However, recent turbulence in the airline industry has left me wondering if DIA's relative status could be adversely impacted by airline contraction. The news that United has cut its routes and flights in Denver, including the highly prized Denver to London flight which began in March 2008 was probably inevitable given current economic conditions but also noteworthy. The Frontier bankruptcy and capacity reductions along with the Southwest expansion in Denver, raises the prospect that Southwest could replace Frontier as the second major airline in Denver. These factors got me thinking about a "terrible two-some" of events which, if they occurred jointly, could harm Denver's status as a major hub:

  • United merges with Continental (or another major airline) or is forced into a dramatic restructuring and reduces flights dramatically in Denver to focus on other hubs.
  • Frontier is forced into Chapter 7 bankruptcy or a merger, eliminating the only major airline headquartered in Denver.
If these two events came to pass, it could raise the cost and reduce the convenience of air travel in Denver and drag down the regional economy. Even a short-term dislocation of traffic at DIA could prevent the region from attracting investment at a critical time and in key sectors with long-term consequences. For example, a major contraction at DIA could disrupt the emergence of the regional renewable energy cluster in Colorado, causing businesses to relocate to other parts of the country. Once you "lose" a cluster, its almost impossible to win it back.

In the long-term, DIA's location in the middle of the country, capacity and expandability and runway design should allow it to thrive as a key hub in the U.S. airline network. However, let's hope in the short-term we are able to avoid the "terrible two-some" listed above.

Tuesday, June 24, 2008

The Decline of the Exurbs?

One of many recent articles about the decline of the outer fringes of suburbia due to rising gas and energy prices, changing tastes and urban revitalization. This article is particularly interesting because it features Metro Denver and it offers the national perspective of the New York Times. A clear trend in the current housing market turbulence is that residential properties closer to an urban core are holding their value much better than distant suburbs.

Friday, June 20, 2008

Colorado Ranked Thrid in Milken Institute's State Technology and Science Index Report

"Because states can no longer succeed with a low-skill, low-cost economic development formula, they must compete globally on the basis of new ideas, new products and new markets, along with superior productivity growth, the report states. The future will belong to those regions that can develop a thriving technology industry in a wide variety of fast-growing fields including biotech, clean technology, nanotechnology, communications and next-generation computer applications."

The Milken Institute - July 19, 2008

The Milken Institute released its 2008 State Technology and Science Index which ranks states by a range of criteria and indices to see which states are best positioned to achieve economic growth due to success in high technology industries.

The good news for Colorado is it maintained its position as the overall third highest scoring state after Massachusetts and Maryland despite increasing competition. Table 1 below compares Colorado's ranking to the other top 5 states in the overall index and five sub-categories.

Table 1 : Top Five States on Milken Science and Technology Indices by 2008 Rank (and 2004 Rank).

Notice that Colorado's highest rank was two in the Workforce Index and its lowest rank was five in the Concentration and Dynamism Index reflecting a strong overall performance across all the index components.

One area for concern is the fact that Colorado fell from first to third in the Human Capital Index between 2004 and 2008. This drop reinforces a long-standing concern on the part of policy-makers and economic development officials that Colorado does a relatively poor job of funding higher education in the state.

Another area of concern is Colorado's rank on the Technology Concentration and Dynamism Index which fell from second to fifth from 2004 to 2008. This index measures the strength of states' technology clusters or agglomerations which are key generators of economic growth through locational externalities. These types of network effects are sources of competitive advantage to states and regions. Thus, it is important to try to understand why Colorado's rank on this index decreased. One sub-component on this index where Colorado fared poorly is the annual growth in high tech industries (2002 to 2006) where Colorado ranked only 41st. Colorado's small net loss over this period reflected the sharp technology sector contraction after the dot com burst in the early part of the decade which hit the state particularly hard given its high concentration in the tech sector. As the technology sector has stabilized, any further decrease in Colorado's ranking in this index in subsequent years would be a warning signal of competitive deterioration.

One Year Anniversery of A View of the Rockies

Today is the one year anniversary of A View of the Rockies' first post. I want to thank the many people who have read, commented on and emailed me about the blog.

Its been an exciting year for economic development in the Denver Region with some of the many highlights including: progress made on FasTracks and Union Station, continuing infill development in downtown Denver, accelerating growth in the renewable energy cluster in Colorado, job growth in other key sectors such as financial services, increasing flights and passengers at DIA, and the continuing preparations for the 2008 Democratic National Convention in Denver.

Here's to hoping the second year of this blog's existence will be even more exciting than the first.

Saturday, June 14, 2008

Denver's Five Points District : A Regional Jewel

Over the past year, I have spent several very interesting days in Denver's Five Points neighborhood learning about the district’s African American history and culture. The galleries and exhibits in the Blair Caldwell African American Research Library (see photo to the left) were informative and engaging. The staff at the Black American West Museum, especially Executive Director La Wanna Larson, are both highly knowledgeable and welcoming. I also enjoy the blend of excellent Southern and Caribbean food and casual hospitality at the Welton Street Cafe.

Denver’s Five Points neighborhood has a wealth of African American social, cultural, and historical resources which are unparalleled in the Rocky Mountain Region and represent one of the most important historically African American centers in between Chicago and the West Coast. (Photograph below is the former home of Dr. Justina Ford, the first African American Female Doctor in Colorado and current home of the Black American West Museum).

A few of the many additional community-based resources include, the Stiles African American Heritage Center, Cleo Parker Robinson Dance, the African American Leadership Institute, the Brother Jeff Cultural Center, the James P. Beckworth Mountain Club, and many others.

The history and contributions of the African American Community in Five Points to Denver are emblematic of one of the key themes of this blog: that the City of Denver and its wider Region serve as the Metropole of the Mountain West with a unique and diverse history. A key to promoting economic development in Denver is to build on and promote the unique character and history of the regions' neighborhoods and cities. (Photograph to the left is the Rossonian Building in Five Points with a view of the light rail tracks and Downtown Denver in the background).

With its dedicated residents and businesses, quick light rail connection to downtown, pedestrian oriented commercial strip on Welton Street, sense of history and community and mix of historic buildings and infill redevelopment, the neighborhood is poised for change and growth.

Back in 2002 the City of Denver wisely recognized the historical significance of the neighborhood by creating the Welton Street Cultural/Historical District. The neighborhood's history is physically represented by historical markers, the Deep Rock Building's Neighborhood History Photographs, the Blair Caldwell Library, public art and historical information located at the light rail stops, Dr. Justina Ford's relocated Victorian house, now serving as the Black American West Museum and in many other ways.

However, Five Point's sense of history and place could be strengthened by the use of additional public art work and signage to increase the sense of arrival into the district at key locations in the neighborhood including near the Blair Caldwell Library at the entrance to the neighborhood from Downtown Denver. Additionally, signage and public maps showing key sites and places of interest would improve wayfinding and visitor accessibility to neighborhood. (Photograph to the right is Deep Rock Water Building on Welton Street Displaying Large Format Five Points Neighborhood Historical Photos).

This is one of my favorite neighborhoods in Denver and I encourage everyone who has the opportunity, to spend some time there.

The DNC Host Committee's Fundraising Struggles are Nerve-Wracking

Scaled back welcoming events and postponed media planning tours due to fund raising difficulties are making me nervous that the Denver Region could look ill-prepared in front of the national media if the local DNC Host Committee fails to meet its fund raising obligations. For earlier blogs on the the convention see here and here.

To contribute, go to the Denver 2008 Planning Committee's web site.

Saturday, June 7, 2008

Correction to "A Family Connection to Lower Downtown Denver "

Apologies for the long absence since my last post. During this period I took several trips, including a visit to Denver where I gathered some additional information about my family's connection to Lower Downtown. I want to supplement and correct a blog post from October 2007 about my maternal Grandfather, Fred Hosken, and Uncle, Edward Hosken's business, the Refrigeration Services Company (RSC).

After the Hosken's purchased RSC, it was located near 15th and Blake Streets in LoDo during a roughly ten year period in the 1940s and 1950s. In my previous blog, I identified the current address of the site where RSC was located as 1517-1521 Blake Street which is today occupied by Wahoos Restaurant. The actual address of the former RSC site is 1507-1509 Blake Street where FedEx Kinko's is located - one storefront south of Wahoos.

See Photos from 1950s of RSC and Today of FedEx Kinko's. on Blake Street in Downtown Denver.

Notice the clear similarities between the storefronts in the two photographs, the size, shape and spacing of the two doors, the display windows and the six second story windows. Also notice the similarities in the size, shape and placement of the door and second story window on the building to the right in both photographs (today Wahoos). This is clearly the same building in both photos.

One of the things which confused me during my previous post was the fact that today there is not a building to the left of FedEx Kinko's, there is a surface parking lot but in the photo above of RSC there is a building. Clearly the building was torn down sometime after the RSC photo was taken. The demolition of the building to the south of RSC, on the corner of 15th and Blake Street probably explains why the addresses on this block have been slightly re-numbered.